Rice in car tank? India’s ethanol recipe is changing

India may need to increasingly use rice for ethanol production this year due to lower maize and sugarcane acreage, according to senior sugar industry executives. Rice's share in ethanol feedstock could rise by 15-20%, as rice currently accounts for about 26.79% of the feedstock, compared to roughly 28% from sugarcane, with maize planting down by 4%.

The shift matters as sugar prices have hit record highs due to weak rainfall in Maharashtra and Karnataka, the country's two largest sugarcane-producing states, raising concerns over a lower output next year. The government plans to ask sugar mills to cap ethanol production from sugarcane juice and B-heavy molasses and focus more on grains.

With rice stocks at a record 68.43 million tonnes as of June 1, this could help address ethanol availability concerns. However, any decline in crop yields could still lead to higher food prices. Indian ethanol targets 20% blending in petrol, and reduced ethanol availability from sugarcane might require greater use of grain-based feedstocks like rice and maize.

The government has allocated an additional 55 lakh tonnes of 100% broken rice through e-auctions for ethanol manufacturers to use.